Allocative efficiency occurs when price ______.
a. is above the ATC curve
b. meets the ATC curve
c. is less than marginal cost
d. equals marginal cost
d. equals marginal cost
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People are unlikely to choose to pay extra for a low-emissions automobile, because they:
a. do not fully understand the environmental benefits of lower emissions. b. are better off "free-riding" on others' attempts to reduce emissions. c. would have to sacrifice fuel efficiency and automotive performance. d. cannot afford the extra expense of "green" technology.
If the CEO of a large corporation uses the corporate jet to fly friends to the Super Bowl at company expense, this is most clearly an example of
a. the duality problem. b. the violation of ceteris paribus conditions. c. a negative externality. d. the principal-agent problem.